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You were hired as an equity analyst for American Express. You have computed the following figures for two manufacturers that are similar in business. The first, ABC, has Net Operating Profit Less Adjusted Taxes (NOPLAT) of $325 million, invested capital without goodwill of $2,500 and goodwill of $950 million. The second business is MNO has NOPLAT of $750 million, invested capital without goodwill of $6,000 million and no goodwill.

The cost of capital for ABC and MNO is 10%.

Compute Return on Invested Capital without goodwill for ABC?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92040928

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